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OpEdNews Op Eds    H3'ed 9/25/21

What should we do about the debt ceiling, and why should you care?

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From Substack

Predictably, Mitch McConnell refuses to raise it and Democrats are trying to pressure Republicans to give in.


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OMG! The DEBT CEILING FIGHT is back.

Many of you may be asking yourself: what the hell is the debt ceiling? In brief, it's the limit on how much the government is allowed to borrow to pay for what it already owes on bills Congress has already agreed on and enacted not for legislation that's currently being debated. If it's not raised, the government can't pay its bills (just as if you or I didn't pay our credit card bill).

That would result in a default, which would mean chaos. Your variable-rate mortgage, for example, would go through the roof. The full faith and credit of the United States would be undermined. The current debt ceiling has to be raised to pay for debt racked up by Republicans as well as Democrats, including trillions under the former guy.

Senate Democrats raised the ceiling for Trump, so why won't Mitch McConnell and his Senate Republicans do it now for Biden? Answer: because the debt ceiling is a political football used by both parties to gain leverage. (Democrats won some concessions when they agreed to raise it last time.)

And McConnell wants as much leverage as possible for the pending fights over Biden's $3.5 trillion plan, the filibuster and voting rights, and so on. But it's a dangerous football, akin to the one the President carries around with the nuclear codes. It could blow the place up.

Senate Democrats need to get 10 Republicans to vote for raising the ceiling (because of the filibuster). What's their plan? Tack a debt-ceiling measure (lifting it through the end of 2022) onto a bill to keep the government funded through December, which will also contain some goodies Republican senators want, such as urgently needed disaster relief for their states.

So what happens if Republican senators still won't budge? Will the government default on its debts? Will we have another government shutdown as we've had before when the government ran out of money?

No one knows, and that's part of the problem. It's spooking the market and causing tumult in the economy. And making Washington nervous.

My guess is that everything will be worked out. McConnell and his Republican colleagues don't want to bring the economy to its knees.

But the longer-term problem of the debt ceiling will remain. May I make an humble suggestion? Abolish the debt ceiling once and for all. Put a measure to abolish it in the Democrat's upcoming reconciliation bill.

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Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.

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Tom Hilton

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Congress codified a game of hotrod chicken and called it the debt ceiling. Promoted as fiscal responsibility, it can only achieve one purpose and that irresponsible - to technically default on US debt. It is metaphorically, Congress shooting the US economy in the foot. However, if the US hits the damned ceiling, every American will start limping.

Submitted on Sunday, Sep 26, 2021 at 1:35:06 AM

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Scott Baker

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Thank you for this insightful article, but it does not go far enough. The president could direct his Treasury Secretary to ignore the unconstitutional debt ceiling altogether by instructing her to pay off expenditures ALREADY AUTHORIZED with the electronic equivalent of United States Notes. These have precedent going back to president Lincoln, who issued $450m of them - roughly doubling the size of the then Federal Budget and adding 5% to then American GDP (calculated retroactively). The president is obligated to have Treasury pay ALL outstanding debts, and can't pick and choose which ones to pay either, e.g. to pay the military but not social security.

I have written about this three times, going back to 2013, and in my book, "America is Not Broke!" The last article is here: Click Here

We need to end the debt ceiling fiction. There is no limit, Constitutionally or practically, to the amount of money Congress can authorize. There are human and natural resource limits, but that has nothing to do with money created to pay for things. It's time to put this dangerous political cudgel to rest.

Submitted on Monday, Sep 27, 2021 at 10:10:24 AM

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